Ending Permanent Periodic Alimony: A Crisis for Enforcing Equitable Distribution Waiting to Happen

The Florida Legislature is trying to end permanent periodic alimony, which could affect how assets are divided in a divorce. This includes things like retirement plans and bonuses from work. The courts have made decisions that make this issue more complicated, and the legislature is trying to find a solution. After a divorce, there can be issues enforcing the court’s decisions about how to divide property. Once the court makes a final decision, it can only enforce the distribution of property that still exists. If the property or its money are no longer there, the court can’t do anything about it. This can cause problems when different courts have different opinions about whether the money is still available. For example, in one case, the court said the money wasn’t there anymore, but in another case, the court said it was. There’s also a law that could help, but it can’t solve everything. It can only make sure that certain retirement benefits get split up as the court ordered. It can’t force cities to spend more money on those benefits. If someone tries to hide money by putting it into property they share with their new spouse, it can be difficult and expensive to get that money back. If they move to another country, it can be even harder to enforce the law and get the money they owe. But there are still ways to try to get it, like getting a lawyer in the other country to help. If they don’t follow the rules, their social security benefits can be used to pay what they owe, but only if they really need it. After a certain amount of time, it might be too late to get the money back. Permanent alimony provides financial support for a spouse after a divorce, even if the paying spouse tries to avoid it. This makes it easier to enforce, especially if the paying spouse lives in a different state. Retirement plans can also be used to pay alimony, but there are different rules for different types of plans. Defined contribution plans have specific categories and rules, but government plans have extra IRS protections. This means they don’t have to follow certain rules for dividing assets in a divorce, but they still need to provide access to the funds if required. This creates different issues for enforcing government retirement plans compared to private ones. In simple terms, even though some retirement plans have rules saying they can’t be given to a spouse in a divorce, courts can still make an exception for it. But it can be complicated to figure out how much money the spouse should get from the retirement plan, and it can be hard to make sure the ex-spouse actually follows the court’s orders. This can make it expensive and tough to make sure everyone follows the rules. In traditional pension plans, there are other benefits like survivor payments and minimum guarantees that aren’t divided in a divorce using a QDRO. This can result in unequal division of payments between ex-spouses. Also, if the employee outlives their ex-spouse, they may receive more of the pension benefit than the court intended. In simple terms, when it comes to retirement plans like 401(k)s and similar accounts, issues can arise in divorce situations. This is because the money in these accounts is considered marital property, even if it was originally non-marital. For example, if one spouse takes out a loan from their retirement account and repays it using money from their job, that money becomes marital property and can be divided in a divorce. This can create confusion and disagreements about how much of the retirement account belongs to each spouse. It’s important to figure this out before the divorce is finalized to avoid problems later on. When permanent periodic alimony ends, there can be a lot of issues with enforcing retirement plans. This happens when the values of the plans aren’t properly figured out, and when lawyers don’t understand how to divide the benefits. This can lead to problems later on when trying to enforce the division. There was a court case called Vizcaino that made things even more confusing, because it didn’t clarify how to enforce property divisions in retirement plans. Overall, it can be a big headache to figure out and enforce retirement plans after alimony ends. The nonassignment clause in retirement plans was originally added to protect women and children from creditors, not to keep a spouse from sharing benefits. The spouse seeking enforcement of the retirement plan property right is not a creditor because they already own the cash payments under state law. The employee does not actually own the retirement plan asset – the trust and plan sponsor do. Once the final judgment is entered, the property right passes to the individual, and they are not magically transformed into a debt collector because they already own the cash payments under the same state law. The law doesn’t consider that cash payments given to an employee can be assigned to creditors if they owe a debt. This means that the employee effectively owns the cash, and a court can force the employer to pay it out as part of a divorce settlement. However, some court rulings have made it hard to enforce these payments, so it’s better to receive alimony instead. Alimony can be changed if needed, but this is not possible with certain types of payment. The court has the power to make a spouse who cheated by giving away property give it back to their ex. They can also make them pay more alimony if they did it on purpose. This can be enforced in other states too. The law for this is called the Uniform Interstate Family Support Act. The deferred retirement option program (DROP) allows municipal employees to retire early with an unreduced pension and receive their pension payments in a special account with interest while still working. It has been the subject of many court cases. Jerry Reiss, a pension expert, and Marc H. Brawer, a family law expert, have written about the legal implications of DROP. “To teach its members to be responsible and help the community, make the legal system better, and progress the study of law.”

Source: https://www.floridabar.org/the-florida-bar-journal/ending-permanent-periodic-alimony-a-crisis-for-enforcing-equitable-distribution-waiting-to-happen/